Riordan Trucking has sales of $18M and an accounts receivable balance of $1M. The firm has...

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Finance

Riordan Trucking has sales of $18M and an accounts receivablebalance of $1M. The firm has projected next year's sales at $24Mand wants to reduce ACP by 2 days. Calculate Riordan's projectedaccounts receivable balance. (Round to the nearest $ and assume 360days.)
a. $1.0M
b. $1.2M
c. $1.4M
d. $1.6M

Answer & Explanation Solved by verified expert

3.9 Ratings (388 Votes)

Option b is correct First we will calculate the accounts receivable turnover and then we will calculate the average collection period ACP Accounts receivable turnover Sales Accounts See Answer

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Riordan Trucking has sales of $18M and an accounts receivablebalance of $1M. The firm has projected next year's sales at $24Mand wants to reduce ACP by 2 days. Calculate Riordan's projectedaccounts receivable balance. (Round to the nearest $ and assume 360days.)a. $1.0Mb. $1.2Mc. $1.4Md. $1.6M